VC Perspectives From A Former Entrepreneur - Jeff Bussgang

March 15, 2005

What is Market?

A breathless entrepreneur is on the other line. "I'm being courted to become VP of Business Development at this hot, venture-backed start-up. I have no idea what I should be negotiating for compensation." She races to the punchline fast, with visions of being cheated by the mean VCs dancing in her head, "Can you simply tell me: What is market?"

I can only attempt to answer this question with the perspective of the Boston-area, venture-backed start-up market. Keeping that in mind, and recognizing that every number and opinion has an asterix next to it with a large footnote "it depends...", here goes.

CEO. $175-225K base, $40-80K bonus. 5-7% of the company, maybe 6-8% if they arrive shortly after the A round. Larger companies are at the high end of cash and lower end of equity.

COO. $150-200K base, $25-50K bonus. 1-2% of the company. This position is rare in companies of fewer than 100 employees.

"Top 3-4" VPs (3 most valuable VPS, for example, might be VP Eng., VP Sales, VP BD, CFO). $125-175K base, $25-50K bonus, 0.75-1.5% of the company. Sales VPs are typically at the top end of this range.

Any opinions on east coast vs. west coast VCs and their receptivity to advertising or subscription-based consumer services? Seems like there's a lot of funding happening in the Valley of social networking startups with very little action here.